Here’s why the Premier League will smash its £1.17 billion spending record this summer

Chelsea target Romelu Lukaku could break the transfer fee record this summer.Michael Steele / Getty Images

• All the signs are that the Premier League’s £1.17 billion ($1.5 billion) spending record will be smashed in the coming months.
• Record TV money and pressure to overhaul squads are fuelling a spending bonanza.
• But football writers tell Business Insider that top teams are overpaying for players amid the clamour for talent.

Premier League clubs broke the transfer window record when they spent £1.17 billion in 2016. This was a whopping 34% increase on the previous record of £870 million in 2015.

Fast forward a year and it looks like we’re heading toward another record-breaking summer as England’s biggest clubs are linked with some of the most expensive footballers in Europe.

“When you think that several clubs could be pushing £200 million each by themselves and that most clubs will spend a minimum of tens of millions, [breaking the transfer record] is clearly feasible,” Nick Harris, the Mail on Sunday’s chief sports news correspondent, told Business Insider.

The big spending can be pinned on two factors:

1. The rocketing price of footballers. Record TV money and competition for talent has sparked insane inflation in transfer fees.
2. Top clubs desperate to overhaul their squads. Managers like Pep Guardiola and José Mourinho are prepared to spend big to refresh their squads with the best players in the world.

Let’s look at each factor in turn.

1. Insane inflation in transfer fees

“Transfer prices are raised because every club is awash with broadcast cash.” That’s the straightforward analysis of Peter Staunton, the chief correspondent at football website Goal.com.

Sky and BT Sport splashed out a record £5.14 billion for Premier League TV rights in 2015. The deal kicked in during the 2016/17 season, making it the most lucrative in the Premier League’s 25-year history.

Top that up with European money and clubs like Tottenham Hotspur made nearly £200 million last year without winning a single competition. Those with silverware in the trophy cabinet made more.

“To put it crudely, teams have got 50% more to spend this summer, than last summer,” summarised Mail on Sunday writer, Harris.

Selling clubs know this and mark up their prices. The transfer window only opened on Saturday, but there has already been evidence of blockbuster deals. Harris highlighted examples of what he termed “Premier League-flation” on Twitter last week.

Nathan Aké moved from Chelsea to Bournemouth for £20 million last week, becoming the Cherries’ record signing. But as Harris pointed out, his record on paper does little to support his valuation.

Goal.com chief correspondent Peter Staunton pointed to another example: Sunderland goalkeeper Jordan Pickford’s £30 million move to Everton in June. The 23-year-old has represented seven clubs in five years and got relegated with Sunderland last season, but is now the third most expensive goalkeeper of all time.

Jordan Pickford.PA

“Players like Michael Keane and Jordan Pickford would fetch nowhere near the prices quoted for them this summer if they were plying their trade in another league and making a transfer to a bigger team there,” Staunton told BI.

Harris added: “Selling clubs know [other Premier League clubs] have got the cash and are putting premiums on players. The 20 clubs are in fierce competition with each other which in effect means stumping up or missing out.”

But the player who defines transfer market inflation better than most is Álvaro Morata.

Real Madrid reportedly want €70 million for Álvaro Morata.NurPhoto / SIPA USA / PA Images

The 24-year-old striker struggled to secure a first-team role at Real Madrid and was sold to Juventus for €20 million (£17.5 million) in 2014. In 2016, he returned to Real for €30 million. A year later, Real is reportedly now demanding Manchester United pay €70 million for the goalscorer, who is far from first choice. That’s a 133% rise in valuation in just three years.

“Premier League clubs are traditionally the biggest spenders in Europe and the amount of money floating around the league has led to a premium on both inter-Premier League transfers and acquisitions from overseas,” Staunton said.

Morata’s seemingly exorbitant valuation is by no means exclusive. A report published by Swiss football think tank CIES Football Observatory said there are now 13 players who are worth more than the record £89 million Manchester United paid for Paul Pogba last year.

There’s a possibility that one or more of these valuations could be met this summer, meaning the transfer record would be broken for the second year in a row.

Romelu Lukaku looks the most likely candidate. He has been heavily linked with a move from Everton to Chelsea and is valued at £93 million by CIES. Another is Neymar, who is reportedly coveted by Manchester United and is valued at £185 million.

2. Managers are desperate to overhaul their squads

Against the backdrop of Premier League clubs being awash with broadcast cash, some big teams — particularly Manchester United and Manchester City — are desperate to refresh their squads.

“Top clubs are in need of an overhaul. Manchester City is expected to spend a quarter-of-a-billion over the course of the summer,” Goal.com’s Staunton said of City manager Pep Guardiola, who failed to win a trophy last season.

The Spaniard has ageing players, such as 31-year-old captain Vincent Kompany, and wants to build a squad that reflects his “tiki-taka” football ideology, which marries short passing and movement.

Manchester City has already completed deals for Portuguese forward Bernardo Silva and Brazilian goalkeeper Ederson for a combined £76.5 million earlier this month.

Bernardo Silva.PA

Staunton said the £35 million Ederson transfer demonstrates that European clubs add a “premium” when they are dealing with Premier League teams. “When European clubs get a hint of an English club being interested then the prices go right up,” he said.

The Silva and Ederson transfers were agreed before the market officially opened on July 1 and could be seen as a declaration of the club’s intent to spend. City also has its eye on Borussia Dortmund wunderkind Dembélé, which could take the club’s summer outlay past the £150 million mark.

José Mourinho is also determined to add quality to a Manchester United team that finished sixth in the Premier League last season. His priority is a striker, with Morata among the candidates to replace Zlatan Ibrahimovic. Sky Sports columnist Guillem Balagué said United could spend £300 million to £400 million this summer.

José Mourinho has access to £400 million according to Guillem Balagué.Shaun Botterill / Getty Images

Elsewhere, Liverpool, Chelsea, and Arsenal have transfer budgets of £200 million, according to a variety of sources.

Arsène Wenger recently signed a two-year extension to his Arsenal contract, but the Frenchman is under pressure to improve after the Gunners finished fifth in the 2016/17 campaign.

Arsenal is reportedly on the cusp of securing Olympique Lyonnais striker Alexandre Lacazette for £44 million, which would top the £43 million club record fee it paid for Mesut Özil in 2013. Leicester City attacking midfielder Riyad Mahrez is also said to be on the brink of joining the north Londoners for around £35 million.

“I expect the summer transfer spending record in the Premier League to get smashed over the next two months, with gross spending by the 20 clubs likely to surpass £1.5 billion,” said The Mail on Sunday’s Harris. “That’s £75 million per club on average.”

It seems the question is not whether the £1.17 billion transfer record will be broken, but by how much?